Legal Definitions - mutual mistake

Definition: Mutual mistake refers to a situation in which both parties to a contract misunderstand each other's intent or have a belief that does not correspond to the facts or law. This can result in the contract being voidable.

Examples:

• Two parties enter into a contract for the sale of a painting, but both parties mistakenly believe that the painting is an original when it is actually a replica. This is a mutual mistake that could result in the contract being voided.
• Two parties enter into a contract for the sale of a car, but both parties mistakenly believe that the car has never been in an accident when it has. This is a mutual mistake that could result in the contract being voided.

These examples illustrate how a mutual mistake can occur when both parties have a mistaken belief about a material fact that is important to the contract. In both cases, the contract could be voided because the parties did not have a meeting of the minds due to the mutual mistake.